In both goal setting and performance evaluations, there is an ongoing debate as to whether to stress exclusively results or some mix of results and competencies. Companies answer this question in different ways. Those that significantly stress competencies strongly believe that the right behaviors matter as much as pure results, whether financially or project focused. Those that favor results expect quantitative performance criteria to drive competency development.
The best practice is a set of goals and evaluation criteria that combines results and competencies. In this way both individual and overall performance will be maximized. The mix between the two categories should vary based on the job. Let’s look at both approaches and their likely impact:
Purely Results-Based Process – This approach will drive individual performance, particularly in easily measurable jobs such as sales roles. But, high individual performance will come at a cost: lack of teamwork, absence of sharing, potential conflict between sales professionals assigned to the same customer. Almost always, overall performance will suffer despite high achievement by some.
Results and Competency-Based Process – This choice will moderate the negative impacts of a pure results-based process. But, to work successfully, it requires effective manager training. Otherwise, there is a real risk that relatively low performers in terms of results will nevertheless achieve high overall ratings. It is very helpful to have results ratings and competencies ratings separated on the evaluation form so that the overall rating will appropriately blend the two scores in a visible way. The real objective is to drive the workforce to high results and strong behaviors. In this way both individual and overall performance will be maximized.
Where both results and competencies are considered, the mix between them may vary. While the specific allocation will depend on many factors – job, experience, organizational culture, support for competency development, to name a few, it is important that results play an equal or larger role. Where results are less than 50 percent of the overall rating, it is doubtful that strong overall performance will be achieved. On the other hand, where competencies do not make up at least 20 percent of the mix, they are not likely to be taken seriously.
To do this right, you need to understand the behaviors demonstrated by high performers in a job and base the competencies for that job on these behaviors. You also need to think about individuals vs. teams with respect to results and demonstrated competencies. Failure to do this and achieve the right balance undermines collaboration and teamwork. The consequences of this are inevitable: sub-optimal performance and weak employee engagement.
It’s time for your company to give this issue fresh thought. Let’s get the criteria right and get managers to apply them properly.
